[Allianz Logo]
Allianz Life Insurance Company of North America
Home Office: Minneapolis, Minnesota
Service Center: [P.O. Box 3031, Berwyn, PA 19312]
Toll Free # [000-000-0000]
A Stock Company
THIS IS A LEGAL CONTRACT BETWEEN THE POLICY OWNER AND ALLIANZ LIFE INSURANCE
COMPANY OF NORTH AMERICA. PLEASE READ IT CAREFULLY. WE WANT YOU TO UNDERSTAND
THE COVERAGE IT PROVIDES.
BENEFITS WE WILL PAY: We will pay the benefits provided by this Policy when:
o we receive proof of the Insured's death while this Policy is in force; or
o this Policy is surrendered for its Net Cash Value; or
o this Policy matures.
Payment of any benefits and all other rights are subject to the terms of this
Policy.
RIGHT TO EXAMINE POLICY
YOU MAY CANCEL THIS POLICY BY RETURNING IT WITH A WRITTEN REQUEST FOR
CANCELLATION TO THE SERVICE CENTER BY THE LATER OF: (A) THE 30TH DAY AFTER THE
OWNER RECEIVES IT; OR (B) THE 45TH DAY AFTER THE APPLICATION WAS SIGNED. IF THIS
IS DONE, WE WILL REFUND ANY PREMIUM PAID.
THE AMOUNT OR DURATION OF DEATH BENEFIT MAY BE VARIABLE OR FIXED UNDER SPECIFIED
CONDITIONS. CASH VALUES MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE
EXPERIENCE OF THE VARIABLE ACCOUNT.
This Policy is signed for Allianz Life Insurance Company of North America by
/s/ Xxxxxxx X Xxxxxx /s/ Xxxxxxx X Xxxxx
Xxxxxxx X Xxxxxx Xxxxxxx X Xxxxx
President Vice President
A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY WITH ADJUSTABLE
DEATH BENEFIT. Insurance is payable at the Insured's death prior to the Maturity
Date and prior to termination of coverage. Values provided by this Policy are
based on declared interest rates in the Fixed Account, and on the investment
experience of the Variable Account. Value in the Variable Account is not
guaranteed as to dollar amount. The minimum Death Benefit will be at least equal
to the Initial Specified Amount unless you make a Policy change; take a Policy
Loan or Partial Surrender; or make a claim reducing the Death Benefit. The Net
Cash Value is payable on the Maturity Date if the Insured is living.
To obtain information, make an inquiry, or for assistance with a complaint,
please call our toll-free number at [(000) 000-0000].
This is a non-participating Policy.
L40390
TABLE OF CONTENTS
Page
Schedule Page...................................................i
General Definitions (Part 1)....................................3
Ownership of the Policy (Part 2)................................5
Beneficiaries (Part 3)..........................................5
Payment of Policy Benefits (Part 4).............................5
Premium Payments (Part 5).......................................7
Continuation of Insurance upon Discontinuation
of Premium Payments; Termination of Coverage (Part 6)...........8
The Accumulation Value (Part 7).................................9
Investment Options (Part 8)....................................10
The Variable Account (Part 9)..................................11
Policy Values (Part 10)........................................12
Policy Loans (Part 11).........................................13
Other Provisions (Part 12).....................................14
Settlement Options (Following Part 12).........................16
Where to Find it (Inside Back Cover)...........................24
SCHEDULE PAGE
[INITIAL] SPECIFIED AMOUNT (FACE AMOUNT) [$50,000]
STIPULATED PREMIUM [$50.00] MODE: [Monthly]
MINIMUM ADDITIONAL PREMIUM AMOUNT [$50.00]
TARGET PREMIUM.... [$50.00 per month]
MAXIMUM TARGET PREMIUM [$50.00 per month]
*ALL REFERENCES TO PLANNED PREMIUM ARE THE SAME AS REFERENCES TO THE TARGET
PREMIUM.
RISK CLASSIFICATION [Standard Non-Smoker]
POLICY DATE....... [January 1, 2001]
RELEASE DATE...... [February 1, 2001]
POLICY NUMBER..... [DVL123456]
ISSUE AGE......... [35]
SEX............... [Male]
INSURED........... [Xxxx Xxx]
[INITIAL] SPECIFIED AMOUNT [$100,000]
DEATH BENEFIT OPTION [A]
OWNER............. [Xxxx Xxx]
JOINT OWNER....... [Xxxx Xxx]
MATURITY DATE.....* [January 1, 2066]
*IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE SHOWN IF
PREMIUMS PAID ARE INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE.
GUARANTEED INTEREST RATE ON FIXED ACCOUNT (SEE PART 7): 3% FOR ALL POLICY YEARS
LOAN INTEREST RATE (SEE PART 11): EFFECTIVE ANNUAL RATE OF [4%]
ASSUMED INVESTMENT RETURN (SEE PART 13): [5%]
SCHEDULE PAGE,....
CONTINUED.........
MINIMUM SPECIFIED AMOUNT (SEE PART 4 AND PART 10): [$50,000]
MINIMUM SPECIFIED AMOUNT INCREASE (SEE PART 4): [$50,000]
LAST AGE A SPECIFIED AMOUNT INCREASE CAN BE
MADE EFFECTIVE (SEE PART 4): [55]
MINIMUM TRANSFER AMOUNT (SEE PART 8): [$0]
MINIMUM PARTIAL SURRENDER AMOUNT (SEE PART 10): [$0]
MAXIMUM LOAN PERCENTAGE (SEE PART 11) [90%.
WE RESERVE THE RIGHT TO INCREASE THIS PERCENTAGE]
EXPENSE CHARGES AND FEES
......... CURRENT CHARGES GUARANTEED MAXIMUM CHARGES
Administrative Charge: Years 1-5 [$14] per month $15 per month
(assessed as part of the Years 6 and later[$4] per month $6 per month
monthly deduction)
ANNUAL MORTALITY AND EXPENSE RISK CHARGE: [0.60%] 0.60%
(ASSESSED DAILY ON THE DAILY AVERAGE NET ASSETS)
Premium Charge: Years 1-5 [3.5%] 5%
(assessed from each Years 6 and later [1.75%] 5%
premium payment)
Partial Surrender Charge (See Part 10): [$0] $25, or
if less, 2% of
(assessed on each Partial Surrender) the Partial
Surrender
Transfer Fee*: [$0 for first 12 transfers in $25
(assessed on each transfer) each Policy Year. $25 for
each additional transfer.]
WHEN THERE IS A SPECIFIED AMOUNT INCREASE, THE ADMINISTRATIVE CHARGE AND PREMIUM
CHARGE START OVER FROM THE EFFECTIVE DATE OF THE SPECIFIED AMOUNT INCREASE TO
THE SPECIFIED AMOUNT INCREASE'S FIFTH ANNIVERSARY.
*CURRENTLY, ANY TRANSFERS MADE AS A REGULARLY SCHEDULED TRANSFER ARE NOT COUNTED
IN DETERMINING THE APPLICATION OF THE TRANSFER FEE
SCHEDULE PAGE,....
CONTINUED.........
SURRENDER CHARGES:
.........END OF POLICY YEAR SURRENDER CHARGES
......... [1 - 10 $1,035
......... 11 $ 828
......... 12 $ 621
......... 13 $ 414
......... 14 $ 207
......... 15 $ 0 ]
SURRENDER CHARGES ARE LEVEL IN THE FIRST [10] POLICY YEARS. FROM THE BEGINNING
OF POLICY YEAR [11] TO THE END OF POLICY YEAR [15], THE SURRENDER CHARGES SHOWN
DECREASE UNIFORMLY ON A MONTHLY BASIS.
WHEN A SPECIFIED AMOUNT INCREASE IS APPROVED, AN ADDITIONAL SCHEDULE OF
SURRENDER CHARGES WILL APPLY FOR [15] YEARS FROM THE EFFECTIVE DATE OF THE
SPECIFIED AMOUNT INCREASE. THE ADDITIONAL CHARGE SCHEDULE WILL BE PROVIDED IN A
REVISED SCHEDULE PAGE.
MORTALITY TABLE BASIS (SEE PART 12):[1980 Commissioner's Standard Ordinary
Smoker and Nonsmoker, Male and Female, Mortality Tables (age last birthday) ]
TABLE MULTIPLIER (SEE TABLE OF GUARANTEED MAXIMUM STANDARD MONTHLY COST OF
INSURANCE RATES): [ 1]
[FLAT EXTRAS (SEE TABLE OF GUARANTEED MAXIMUM STANDARD MONTHLY COST OF INSURANCE
RATES): $0 for x years]
SETTLEMENT PROCEEDS (SEE PART 13):
UPON INSURED'S DEATH, SETTLEMENT PROCEEDS ARE:
[110%of the Death Benefit proceeds for Annuity Options 1- 5.
110% of the Death Benefit proceeds for Annuity Option 6 if the period certain is
at least 10 years.] [Otherwise, 100%] of the Death Benefit proceeds.
UPON SURRENDER OR MATURITY, SETTLEMENT PROCEEDS ARE:
[100%] of the Net Cash Value [UPON ELECTION OF THE PREFERRED SETTLEMENT VALUE
OPTION, SETTLEMENT PROCEEDS ARE:
100% of the Preferred Settlement Value]
SCHEDULE PAGE,
CONTINUED
ALLOCATION SCHEDULE ON THE POLICY DATE
INVESTMENT OPTIONS
.........
VARIABLE ACCOUNT ALLOCATIONS
1. [Growth & Income Fund 20%
2. Real Estate Securities Fund 20%
3. Rising Dividends Fund 20%
4. Xxxxxxxxx International Equity Fund 20%
5. Small Cap Fund 20%]
FIXED ACCOUNT [0%]
INVESTMENT OPTION WHERE ALL NET PREMIUMS ARE ALLOCATED
PRIOR TO THE REALLOCATION DATE: [USALLIANZ VIP MONEY MARKET]
MINIMUM INCREASES IN DEATH BENEFIT CAUSED BY A PREMIUM PAYMENT THAT WILL ALLOW
US TO REQUIRE UNDERWRITING OR LIMIT THE PREMIUM (SEE PART 5):
THE LESSER OF
(A) [$25,000]; OR
(B) [TWO] TIMES THE DEATH BENEFIT PRIOR TO THE PAYMENT OF THE PREMIUM.
SCHEDULE PAGE,
CONTINUED
ADDITIONAL BENEFIT RIDERS AND RIDER DATE RIDER COST CHARGES
ENDORSEMENTS (EFFECTIVE DATE)
------------------ -----------------------------------
[Accelerated Benefit Rider January 1, 2001 Annual charge of $2.63 per
$1,000 of the Current Specified
Amount less Policy Loans]
[No Lapse Guarantee Rider January 1, 2001 Monthly charge of $0.01 per
Rider Expiry Date: $1,000 of the Current Specified
January 1,2031 Amount]
[Unemployment Benefit
Endorsement]
[Preferred Settlement Value
Option Endorsement ]
[Non-Modified Endowment Contract
Endorsement]
PART 1. GENERAL DEFINITIONS
ACCUMULATION VALUE: The sum of any amounts in the Fixed Account and in the
Variable Account.
AGE: The Insured's age at last birthday determined as of the beginning of each
Policy Year. Also, where applicable, Age is the Insured's age last birthday
determined as of the beginning of the effective date of a Specified Amount
increase and the anniversaries of such effective date.
BENEFICIARY, CONTINGENT BENEFICIARY: The person or persons who will receive any
Death Benefit proceeds. The Primary Beneficiary and Contingent Beneficiary, if
any, are named in the application, unless changed later. The Contingent
Beneficiary, if any, will become the Primary Beneficiary should the Primary
Beneficiary die
CASH VALUE: The Accumulation Value minus the Surrender Charge. Surrender Charges
are described on the Schedule Page.
COMPANY: Allianz Life Insurance Company of North America. The Company is
referred to in this Policy as we, our, or us.
CURRENT SPECIFIED AMOUNT: The Initial Specified Amount plus Specified Amount
increases minus Specified Amount decreases.
FIXED ACCOUNT: Part of Allianz Life's general account which consists of Allianz
Life's assets other than those allocated to the Variable Account or any other
separate account.
GROSS PARTIAL SURRENDER AMOUNT: The Partial Surrender plus any applicable
Partial Surrender Charge.
INCOME DATE: The date on which Annuity Payments are to begin if an annuity
option is chosen.
INITIAL SPECIFIED AMOUNT: The initial amount of coverage on the Policy Date and
shown on the Schedule Page.
INSURED: The person whose life is covered by this Policy. The Insured is named
on the Schedule Page.
INVESTMENT OPTIONS: The Fixed Account and the Variable Options under the
Variable Account.
MATURITY DATE: The last date to which premiums can be paid and coverage
continued under this Policy.
MONTHLY DEDUCTION: A monthly charge we deduct from the Accumulation Value.
NET CASH VALUE: The Cash Value minus any Policy Loan.
NET PREMIUM: Premiums minus the premium charge shown on the Schedule Page.
OWNER: The person having all rights under this Policy, except where rights
cannot be changed for Irrevocable Beneficiary. The Owner as of the Policy Date
is named on the Schedule Page. The Owner is referred to in this Policy as you
and your.
PAYEE: The Beneficiary for Death Benefit settlements or you for all other
settlements.
POLICY DATE: The Policy Date is shown on the Schedule Page. It is used to
determine the Monthly Anniversary Date, Policy Anniversary, and Policy Years.
POLICY LOAN: Total outstanding loans made on the Policy, including interest paid
in advance for the current Policy Year.
POLICY MONTH: The first Policy Month starts on the Policy Date. Future Policy
Months start on the same day in each subsequent month, known as a Monthly
Anniversary Date. If the Monthly Anniversary Date falls on a date other than a
Valuation Date, the Monthly Anniversary Date will be on the next Valuation Date.
POLICY YEAR, POLICY ANNIVERSARY - The first Policy Year starts on the Policy
Date. Future Policy Years start on the same day and month in each subsequent
year, known as a Policy Anniversary.
REALLOCATION DATE: The date 30 days after the Release Date indicated on the
Schedule Page.
SURRENDER CHARGE: A charge assessed if the Owner wholly surrenders the Policy
within the period indicated on the Schedule Page.
UNLOANED ACCUMULATION VALUE: The Accumulation Value minus the Policy Loan.
VARIABLE OPTIONS: The Investment Options in the Variable Account available to
you in this Policy.
VALUATION DATE: Each day that the New York Stock Exchange is open for trading.
VALUATION PERIOD: The period commencing at the close of business of the New York
Stock Exchange on each Valuation Date and ending at the close of business for
the next succeeding Valuation Date. A business day is also a Valuation Period.
PART 2. OWNERSHIP OF THE POLICY
You, the Owner, are named on the Schedule Page as of the Policy Date. You may be
the Insured or someone other than the Insured. If another person becomes the
Owner after the Policy Date, we will have a record of such change at the Service
Center.
During the Insured's life, you may exercise any rights and receive all benefits
described in this Policy subject to the rights of the Irrevocable Beneficiary.
Joint owners can own the Policy. Authorization of all joint owners is required
for all Policy changes except for transfers and premium allocations.
TRANSFER OF OWNERSHIP. You may transfer ownership of this Policy. We will not be
responsible for any payment we make or other action we take before a copy of the
written transfer is received at the Service Center. We are not responsible for
the validity of the transfer. We may require the Policy to record the transfer.
The new Owner acquires ownership rights and takes the Policy subject to all
Policy Loans. Policy Loans are discussed in Part 11.
USE OF THE POLICY AS SECURITY. This Policy may be used as collateral security
for a loan or other obligation. This is not a transfer of ownership. The person
(bank or other lender) to whom the Policy is given as security does not become
the Owner. We will not be responsible for any payment we make or other action we
take before a copy of the security agreement is received at the Service Center.
We are not responsible for the validity of the security agreement.
PART 3. BENEFICIARIES
We will pay any Death Benefit proceeds to the Primary Beneficiary (ies). You may
name Contingent Beneficiaries to receive the proceeds if the Primary Beneficiary
dies before the Insured.
The Beneficiary (ies) designation in effect on the Policy Date will remain in
effect until changed. The Beneficiary (ies) is entitled to receive the benefits
to be paid at the time of the Insured's death.
Unless you provide otherwise, the Death Benefit will be paid in equal shares to
the survivor(s) as follows:
1. To the primary Beneficiary (ies) who survive the Insured; or if there are
none
2. To the contingent Beneficiary (ies) who survive the Insured; or if there are
none
3. To you or your estate.
CHANGE OF BENEFICIARIES. You may name one or more Beneficiaries. You may change
the Beneficiary at any time during the Insured's life. To change a Beneficiary,
we must receive a written request at the Service Center. We may require the
Policy to record the change. We will make the request effective when signed,
subject to any action we take before receiving it.
IRREVOCABLE BENEFICIARIES. You may name one or more Irrevocable Beneficiaries.
An Irrevocable Beneficiary is one whose rights cannot be reduced or destroyed
without his or her consent.
PROCEEDS TO MINORS. If a Beneficiary is a minor, we will make payment to the
court-appointed guardian of the minor's estate. We may require proof of age of
any Beneficiary.
PROTECTING THE PROCEEDS FROM THE CLAIMS OF CREDITORS. Proceeds payable to a
Beneficiary will be free from the claims of creditors, to the extent allowed by
law.
PART 4. PAYMENT OF POLICY BENEFITS
We will pay the benefits under this Policy if it is still in force upon the
earliest of:
o Proof of death of the Insured; or
o The date you surrender the Policy for its Net Cash Value; or o The Maturity
Date shown on the Schedule Page.
This Policy will terminate once the benefits become payable.
The MATURITY DATE is the last date to which premiums can be paid and coverage
continued under this Policy. If the Insured is alive on the Maturity Date and
this Policy is still in force, we will pay a Maturity Benefit. If the Insured
dies before the Maturity Date while this Policy is in force, we will pay a Death
Benefit. Coverage will not continue to the Maturity Date if premiums paid,
interest credited, and/or the investment returns in the chosen Variable Options
are not sufficient to keep the Policy in force until the Maturity Date.
The proceeds may be taken in a lump sum or applied under one of our settlement
options. Our settlement options are described in the section following Part 12.
If the proceeds are applied under a settlement option, we will issue a new
contract (payment contract). The effective date of the payment contract is the
date benefits become payable under this Policy.
DEATH BENEFIT. The Death Benefit prior to the Insured's Age 100 depends on the
Death Benefit Option in effect as described below. After the Insured's Age 100,
the Death Benefit is the Accumulation Value.
The amount of the Death Benefit depends on the Current Specified Amount, the
Accumulation Value on the date of the Insured's death and the Death Benefit
Option in effect at that time.
The Current Specified Amount is the sum of all of the Specified Amount portions.
The Initial Specified Amount and each Specified Amount increase still in effect
are Specified Amount portions. The Initial Specified Amount and the Death
Benefit Option on the Policy Date are shown on the Schedule Page.
DEATH BENEFIT OPTIONS.
OPTION A. The amount of the Death Benefit under Option A is the greater of:
o The Current Specified Amount at the beginning of the Policy Month when the
death occurs; or
o The Accumulation Value on the date of death, multiplied by the applicable
factor from the Table of Death Benefit Factors.
OPTION B. The amount of the Death Benefit under Option B is the greater of:
o The Current Specified Amount at the beginning of the Policy Month when the
death occurs, plus the Accumulation Value on the date of death; or
o The Accumulation Value on the date of death, multiplied by the applicable
factor from the Table of Death Benefit Factors.
CHANGE IN DEATH BENEFIT OPTION. You may request in writing a change of the Death
Benefit Option after this Policy has been in force for at least one year. Any
change in Death Benefit Option will take effect on the Monthly Anniversary Date
on or following the date we approve the request for the change.
A change in Death Benefit Option A to Option B will decrease the Current
Specified Amount by the Accumulation Value.
A change in Death Benefit Option B to Option A will not affect the Current
Specified Amount.
CHANGE IN CURRENT SPECIFIED AMOUNT. You may change the Current Specified Amount
of this Policy on any Monthly Anniversary Date after the Policy has been in
force at least one year, subject to the following requirements.
SPECIFIED AMOUNT INCREASE. To increase the Current Specified Amount, you must:
o Submit an application for the increase;
o Submit proof satisfactory to us that the Insured is an insurable risk; and
o Pay any additional premium required so that the Net Cash Value is sufficient
to cover three Monthly Deductions.
We show the last Age a Specified Amount increase can be made on the Schedule
Page. Each Specified Amount increase must be at least as large as the minimum
Specified Amount increase shown on the Schedule Page. A Specified Amount
increase will take effect on the Monthly Anniversary Date on or following the
day we approve the application for the increase.
The risk classification that applies for any Specified Amount increase may be
different from the risk classification that applies for the Initial Specified
Amount.
SPECIFIED AMOUNT DECREASE. To decrease the Current Specified Amount, you must
make the request in writing. You can request a decrease in the Current Specified
Amount
o Twelve months after the Policy Date; or if later,
o Twelve months after the effective date of any Specified Amount increase.
A Specified Amount decrease reduces any previous Specified Amount increases that
are then in effect starting with the most recent increase. If any portion of the
decrease is left after all Specified Amount increases have been reduced; it
reduces the Initial Specified Amount. We will not permit you to reduce the
Current Specified Amount to an amount less than the minimum Specified Amount
shown on the Schedule Page.
CHANGE OF RISK CLASSIFICATION. After the later of the first Policy Anniversary
or one year after the effective date of the last Specified Amount increase, you
can request a change to a better risk classification. The change will be
effective on the Monthly Anniversary Date on or following the date we approve
the change.
LIMITATION ON CHANGES. We reserve the right to decline to make any change that
would cause this Policy to fail to qualify as life insurance under applicable
tax law. We base this determination on our interpretation of tax law.
DEATH BENEFIT PROCEEDS: We will pay any Death Benefit proceeds to the
Beneficiary as described in Part 3. The proceeds may be taken in a lump sum or
applied under one of our settlement options.
The Death Benefit proceeds payable is the Death Benefit then in effect:
o Plus any additional amounts provided by rider on the life of the Insured; o
Plus any Policy loan interest that we have collected but not earned; o Minus any
Policy Loan; o Minus any unpaid Monthly Deductions.
We will require due proof of death and settlement election and any required
governmental forms before any Death Benefit is paid. Due proof of death will be:
1. A certified death certificate; or
2. A certified decree of a court of competent jurisdiction as to the finding of
death; or
3. Any other proof satisfactory to us.
We pay all Death Benefits according to the applicable laws and regulations
governing Death Benefit payments.
SURRENDER BENEFIT. In Part 10, we describe the benefit if you surrender this
Policy for its Net Cash Value. We will refund any Policy loan interest that we
have collected but not earned. If this Policy is surrendered, you can receive
the proceeds in a lump sum or apply them under one of our settlement options. We
must receive written notice if the proceeds are to be applied under one of our
settlement options.
MATURITY BENEFIT. The amount of the benefit if this Policy is in force on the
Maturity Date is the Net Cash Value (Part 10). We will pay you any Maturity
Benefit proceeds at the Maturity Date. We will refund any Policy loan interest
that we have collected but not earned. You can receive the proceeds in a lump
sum or apply them under one of our settlement options. We must receive written
notice if the proceeds are to be applied under one or our settlement options.
PART 5. PREMIUM PAYMENTS
STIPULATED PREMIUMS. Stipulated premiums may be annual, semi-annual, quarterly
or monthly payments. The stipulated premium and the payment interval mode on the
Policy Date are shown on the Schedule Page. You may change the amount and
frequency of premiums. We have the right to limit the amount of any increase.
UNSCHEDULED PREMIUMS. Additional unscheduled premium payments can be made at any
time while this Policy is in force. We have the right to limit the number and
amount of such premium payments.
LIMITATION ON PREMIUM PAYMENTS. We will accept premium payments that are at
least equal to the minimum additional premium amount shown on the Schedule Page.
We may decline premiums in order to preserve the favorable tax status of this
Policy.
Therefore:
o We may limit the amount of premiums paid; and
o We may return any premiums that exceed the limits under the tax laws of the
United States and the state where this Policy is delivered.
We may also limit a premium payment or request underwriting approval if a
premium payment causes an in increase in Death Benefit as indicated on the
Schedule Page.
PART 6. CONTINUATION OF INSURANCE UPON DISCONTINUATION OF PREMIUM PAYMENTS;
TERMINATION OF COVERAGE
The Policy will continue as long as the Net Cash Value on the Monthly
Anniversary Date is large enough to cover the Monthly Deduction for that month.
TERMINATION. This Policy will terminate on the earliest of the following dates:
o The date you surrender the Policy for its Net Cash Value; or
o The date the Policy terminates because the current Policy Loan exceeds the
limit on the Policy Loan; or o The date of the Insured's death; or o The
Maturity Date; or o The end of a 61 day grace period; or o The date the Current
Specified Amount is zero.
GRACE PERIOD. A grace period is 61 days after the Monthly Anniversary Date when
the Net Cash Value is not large enough to cover the Monthly Deduction on that
date.
We will send you a written notice at least 31 days before grace period ends.
This notice will show how much must be paid to keep the Policy from terminating.
We will send the notices to the last address you have given us. Your Policy will
terminate without value at the end of a grace period unless we receive the
premium payment indicated on the notice during the grace period.
If the Insured dies during a grace period, we will deduct the charges that would
have been required to keep your Policy from terminating from the amount we would
otherwise pay out.
HOW TO REINSTATE THIS POLICY. This Policy may be reinstated (coverage restored)
any time within five years after it has terminated at the end of a grace period.
To reinstate this Policy, you must:
o Submit an application for reinstatement;
o Submit proof satisfactory to us that the Insured is still insurable at the
risk classification that applies for the latest Specified Amount portion
then in effect;
o Pay or agree to reinstate any Policy Loan with loan interest accrued to the
end of the grace period. There is no interest charged from the end of the
grace period to the reinstatement date; and
o Pay the premium required to reinstate the Policy.
The premium required to reinstate the Policy equals:
o The amounts that would have been required for this Policy to continue in
force without entering a grace period for each month during the grace
period at the end of which it terminated; plus
o Three Monthly Deductions; plus o Any related premium charges.
The reinstatement date will be the Monthly Anniversary Date on or following the
day we approve the application for reinstatement. The Accumulation Value on the
reinstatement date will be equal to the Accumulation Value on the Monthly
Anniversary Date when the grace period ended, plus Net Premiums paid at
reinstatement. The Surrender Charge on the reinstatement date is equal to the
Surrender Charge on the Monthly Anniversary Date when the grace period ended.
This Policy may not be reinstated after:
o It has been surrendered for its Net Cash Value; or o The Insured's death; or o
The Maturity Date.
PART 7. THE ACCUMULATION VALUE
On the Policy Date, the Accumulation Value equals:
o The first Net Premium paid; minus
o The Monthly Deduction for the first Policy Month.
After the Policy Date, the Accumulation Value equals the sum of the amounts in
the Investment Options.
The Accumulation Value in the Variable Account is the sum of the Accumulation
Values in each of the Variable Options chosen. The Accumulation Value in each
Variable Option is equal to the Accumulation Unit value for that Variable Option
multiplied by the Accumulation Units in that Variable Option.
The Accumulation Value in the Fixed Account on any specified date is equal to
(a) plus (b) plus (c) minus (d) minus (e) where:
(a) Is the Accumulation Value in the Fixed Account on the last Monthly
Anniversary Date, plus interest from the Monthly Anniversary Date to the
specified date;
(b) Is any Net Premiums credited to and any transfers made to the Fixed Account
since the last Monthly Anniversary Date, plus interest from the date of the
Net Premiums or transfer to the specified date;
(c) Is any Policy loan amounts transferred from the Variable Account since the
last Monthly Anniversary Date, plus interest from the date of the loan to
the specified date;
(d) Is any transfers from the Fixed Account to the Variable Account since the
last Monthly Anniversary Date, plus interest from the date of the transfer
to the specified date;
(e) Is the Gross Partial Surrender Amounts from the Fixed Account since the
last Monthly Anniversary Date, plus interest from the date of the surrender
to the specified date.
If the specified date is a Monthly Anniversary Date, the Accumulation Value is
reduced by the Monthly Deduction deducted from the Fixed Account.
The guaranteed interest rate applied in the calculation of the Accumulation
Value in the Fixed Account is specified in the Schedule Page. Interest in excess
of the guaranteed rate may be applied to the Unloaned Accumulation Value in the
Fixed Account.
MONTHLY DEDUCTIONS. At the beginning of each Policy Month, we make a deduction
from the Accumulation Value.
The Monthly Deduction for a Policy Month equals the sum of:
o The monthly expense charges shown on the Schedule Page and any Schedule Page
supplements;
o The charge for any additional benefit riders for the month; and
o The insurance risk charge for that month.
The Monthly Deduction will be deducted based on the proportions that the
unloaned values in the Fixed Account and in the Variable Options bear to the
Unloaned Accumulation Value.
CHARGES FOR ADDITIONAL BENEFIT RIDERS. The amount of the monthly charge for any
additional benefit riders is calculated as described in the riders and shown on
the Schedule Page.
INSURANCE RISK CHARGES. The insurance risk charge for each Policy Month equals
the insurance risk charges for that month for each Specified Amount portion then
in effect. To determine the insurance risk charge for a Specified Amount portion
for a Policy Month, we multiply:
o The Insurance Risk Amount for the Specified Amount portion for that month; by
o The cost of insurance rate that applies to the Specified Amount portion for
that month.
The Insurance Risk Amount for a Specified Amount portion for a Policy month
equals:
o The Death Benefit associated with that Specified Amount portion divided by
1.002466; minus
o The Accumulation Value at the beginning of the Policy Month, before the
Monthly Deduction for the month is subtracted.
In determining the Insurance Risk Amount, we will first assume that the
Accumulation Value is part of the Initial Specified Amount. If the Accumulation
Value is greater than the Initial Specified Amount, we will assume the
Accumulation Value is part of each Specified Amount increase in order, starting
with the first increase.
The cost of insurance rate for a Specified Amount portion is based on the risk
classification of the Insured that applied to that portion of the Specified
Amount.
The cost of insurance rate for a Policy Month will be on a uniform basis for all
Specified Amount portions that:
o Are in the same Specified Amount band, sex, and risk classification; o Take
effect when the Insureds are the same Age; and o Have been in force the same
lengths of time.
We may change our cost of insurance rates from time to time based on our future
expectations of investment earnings, mortality, persistency, expenses and taxes.
Any change we make will apply to all Specified Amount portions in the same risk
classification.
The cost of insurance rates for standard risk classifications or better will not
be greater than the rates shown in the Table of Guaranteed Maximum Standard
Monthly Cost of Insurance Rates. At Age 100 and later, the insurance risk
charges are zero.
OTHER DEDUCTIONS
The following other deductions from the Accumulation Value are made as they
occur:
o The amount deducted for a Partial Surrender Charge as described under Partial
Surrenders in Part 10; and o The amount deducted for certain transfers as
described under Transfers in Part 8.
PART 8. INVESTMENT OPTIONS
ALLOCATIONS. This Policy provides Investment Options. The Accumulation Value is
allocated to the Variable Options and to the unloaned portion of the Fixed
Account at your direction. The Initial Premium allocation percentages are
indicated in the application for this Policy, a copy of which is attached. These
percentages will also apply to subsequent premium allocations until you change
them.
Allocation percentages must be in whole numbers. The sum of the premium
allocation percentages must equal 100.
Net Premiums received prior to the Reallocation Date will be allocated to the
Investment Option indicated on the Schedule Page.
On the Reallocation Date, the amount in the indicated Investment Option will be
allocated to the Investment Options according to the allocation percentages you
selected for your Policy.
TRANSFERS: You may transfer all or a part of amounts in an unloaned Investment
Option to other Investment Options. We reserve the right to charge for transfers
as indicated on the Schedule Page. All transfers are subject to the following:
1. We deduct any transfer fee from the Investment Option from which the
transfer is made. If the entire amount in the Investment Option is
transferred, then we will deduct the transfer fee from the amount
transferred. If there are multiple Investment Options from which the
transfer is being made, we treat the transaction as a single transfer.
We will deduct any transfer fee proportionately from these Investment
Options. If the remaining amount in an Investment Option is
insufficient to cover the transfer fee allocated to it, we will deduct
the excess proportionately from the other Investment Options from which
the transfer is made.
2. We will not allow you to make transfers before the Reallocation Date.
3. The minimum transfer amount is shown on the Schedule Page.
4. Any transfer direction must clearly specify:
a. The amount to be transferred; and
b. The Investment Options affected.
5. We reserve the right to modify your transfer rights. We will do so if,
in our sole opinion, the exercise of the rights by one or more Owners
would be to the disadvantage of other Owners. Possible changes could
include, but are not limited to:
a. The requirement of a minimum time period between each transfer;
b. Not accepting a transfer request from an agent acting under a power of
attorney on behalf of more than one Owner; or
c. Limiting the dollar amount that may be transferred between the
Investment Options by an Owner at any one time;
We reserve the right at any time and without prior notice to any party to modify
the transfer provisions described above. However, if we do modify these
provisions, we guarantee that they will not be any more restrictive than
described above.
If you elect to use this transfer privilege, we will not be liable for transfers
made in accordance with your instructions. We determine all amounts and
Accumulation Units as of the end of the Valuation Period during which the
request for transfer is received at the Service Center.
PART 9. THE VARIABLE ACCOUNT
THE VARIABLE ACCOUNT: The Variable Account consists of assets we have set aside
and have kept separate from the rest of our assets and those of our other
separate accounts. We credit gains to or charge losses against the Variable
Account without regard to the performance of other investment accounts. The
assets of the Variable Account, equal to reserves and other liabilities of your
Policy and those of other Owners, will not be charged with liabilities arising
out of any other business we may conduct.
The Variable Account assets are divided into Variable Options. We may add
additional Variable Options after your Policy is issued. We may permit you to
transfer your Accumulation Value or allocate your payments to the additional
Variable Options. However, we may impose terms and conditions that may limit
your right to make such transfers or allocations.
Shares of any Variable Option may become unavailable for investment in the
Variable Account. Our Board of Directors may deem further investment in the
shares inappropriate. If so, we may limit purchase of those shares, or
substitute shares.
VALUATION OF ASSETS: We value assets of the underlying fund of each Variable
Option at their Net Asset Value on each Valuation Date.
ACCUMULATION UNITS: We use Accumulation Units to account for all amounts
allocated to or withdrawn from the Variable. We determine the number of
Accumulation Units of a Variable Option purchased or canceled by dividing:
o The amount allocated to (or the amount withdrawn from) the Variable Option;by
o The dollar value of one Accumulation Unit of the Variable Option at the end
of the Valuation Period during which the transaction is processed at the
Service Center.
ACCUMULATION UNIT VALUE: The Accumulation Unit value for each Variable Option
was initially arbitrarily set. We calculate subsequent Accumulation Unit values
for each Variable Option as:
o The Accumulation Unit value for the immediately preceding Valuation Period;
multiplied by o The net investment factor for the Variable Option for the
current period.
The Accumulation Unit value may increase or decrease from Valuation Period to
Valuation Period.
NET INVESTMENT FACTOR: The net investment factor for each Variable Option is
equal to A divided by B, the result multiplied by (1 - C) where:
A is (i) The Net Asset Value per share of the underlying fund
held by the Variable Option at the end of the current
Valuation Period; plus
(ii) Any dividend or capital gains per share declared on
behalf of such underlying fund held by the Variable Option
that has an ex-dividend date within the current Valuation
Period.
B is The Net Asset Value per share of the underlying fund held
by the Variable Option for the immediately preceding Valuation
Period.
C is (i) The Valuation Period equivalent of the mortality and
expense risk charge shown on the Schedule Page; plus
(ii) A charge factor, if any, for any taxes or any tax reserve
we have established as a result of the operation or
maintenance of the Variable Option.
PART 10. POLICY VALUES
The Cash Value equals:
o The Accumulation Value; minus
o The Surrender Charge.
The Surrender Charges are shown on the Schedule Page and any Schedule Page
supplements.
When this Policy terminates, the Accumulation Value may be less than the
Surrender Charge. If so, you will not have to pay the difference to us. If this
Policy is reinstated, we will reinstate the Surrender Charge as described in
Part 6.
The Net Cash Value equals:
o The Cash Value; minus
o The Policy Loan (Part 11).
During the Insured's life, you may:
o Take loans based on the Net Cash Value; and o Make Partial Surrenders; and
o Surrender this Policy for its Net Cash Value.
PARTIAL SURRENDERS: You may make a Partial Surrender from the Net Cash Value at
any time during the Insured's life and before the Policy has terminated. The
minimum Partial Surrender amount is shown on the Schedule Page. The Gross
Partial Surrender Amount may not exceed the Net Cash Value.
We may charge a Partial Surrender Charge when a Partial Surrender is made. The
charge is shown on the Schedule Page.
When a Partial Surrender is made, we will deduct the Gross Partial Surrender
Amount from the Accumulation Value.
You may tell us how much of each Gross Partial Surrender Amount is to be
deducted from the unloaned value in the Fixed Account and in the Variable
Options. If you do not tell us, or we cannot make the surrender on the basis of
your directions, we will make the surrender based on the proportions that the
unloaned value of the Fixed Account and the Variable Options bear to the current
Unloaned Accumulation Value.
We may limit the number of Partial Surrenders in a Policy Year. We will allow at
least one Partial Surrender every Policy Year.
EFFECT OF PARTIAL SURRENDERS ON THE CURRENT SPECIFIED AMOUNT: If Death Benefit
Option A is in effect, we will reduce the Current Specified Amount when a
Partial Surrender is made. We will reduce the Current Specified Amount by the
amount of the Gross Partial Surrender Amount minus the excess, if any, of:
o The Death Benefit at the time the Partial Surrender is made; over o The
Current Specified Amount at the time the Partial Surrender is made.
If the Gross Partial Surrender Amount is less than or equal to the excess
described above, the Current Specified Amount will not be reduced.
Any reduction in the Current Specified Amount will reduce any Specified Amount
increases then in effect starting with the most recent increase. If any of the
reduction is left after all Specified Amount increases have been reduced, it
will be used to reduce the Initial Specified Amount.
LIMITATIONS ON PARTIAL SURRENDERS: We will not permit a Partial Surrender that
would reduce the Current Specified Amount below the minimum Specified Amount
shown on the Schedule Page. In order to preserve a favorable tax status of this
Policy, we will increase the amount of the Partial Surrender.
SURRENDERING THE POLICY FOR ITS NET CASH VALUE. You may surrender this Policy
and receive the Net Cash Value anytime during the Insured's life and before the
Policy has terminated.
The surrender will take effect on the later of:
o The date we receive your written request for the Net Cash Value; or o The date
you request the surrender to take effect.
We terminate this Policy and all coverage under it at 12:01 a.m. Central Time on
the date after the surrender takes effect.
PART 11. POLICY LOANS
We will loan money to you at the effective annual interest rate specified on the
Schedule Page. Interest is payable in advance (for the rest of the Policy Year)
at the time a Policy Loan is made and at the beginning of each Policy Year
thereafter (for that entire Policy Year). We will deduct this interest charge in
addition to the requested loan amount. That total is the Policy Loan. Your
request for a loan must be made in writing.
The Policy Loan will be allocated to the Fixed Account. Unless you specify
differently, the Policy Loan will come proportionately from the unloaned value
in the Fixed Account and the Variable Options. We will transfer assets equal to
the portion of the Policy Loan coming from the Variable Options to the Fixed
Account.
SECURITY. This Policy will be the only security for the loan.
RESTRICTIONS ON MAKING LOANS. Loans will not be available during a grace period
or after the Insured dies.
REPAYING POLICY LOAN. You can repay the Policy Loan, or any part, at any time
while this Policy is effect.
When repayments are made, we transfer assets from the Fixed Account to the
Investment Options based on the premium allocation schedule then in effect. You
may instead request a different allocation.
Because we charge interest in advance, we will refund any interest that we have
not earned to you upon Termination of the Policy or on repayment of all or part
of the Policy Loan.
If you wish to make a loan repayment, you must tell us that the payment you send
is for that purpose. Unless you clearly specify your payment as a loan
repayment, we will assume it is a premium payment.
LIMIT ON POLICY LOAN. Policy Loan must not exceed the maximum loan percentage of
the Cash Value. This maximum percentage is indicated on the Schedule Page.
If the Policy Loan, adjusted for any unearned loan interest, equals or exceeds
the limit, we can terminate the Policy. The Policy will terminate 61 days after
we have mailed written notice to you and to anyone who is relying on the Policy
as collateral security as shown on our records. Within this 61-day period, you
can make premium payments or loan repayments sufficient to make the Policy Loan
less than the maximum loan. If you do so, your Policy will not terminate. Notice
will be sent to the last known addresses we have on file.
PART 12. OTHER PROVISIONS
This part contains important general provisions.
THE CONTRACT. The Policy, the application and any attached riders and
endorsements, constitute the complete agreement between you and us. We have
issued the Policy in exchange for the information provided in the application
and the payment of premiums.
Any change in the terms of our Policy must be made in writing. Only our
President or Secretary is authorized to change or waive the terms of the Policy.
LIMITATIONS ON CONTESTING THE POLICY. We consider statements made in the
application by the applicant to be representations and not warranties. We may
contest any Specified Amount portion of this Policy if we rely on a material
misrepresentation in the application for issue or reinstatement of that
Specified Amount portion. We attach a copy of the application to the Policy when
issued. We will mail a copy of the application or reinstatement application to
your last known address when we reinstate the Policy or when we make a Specified
Amount increase effective.
We may not contest any Specified Amount portion after it has been in effect
during the Insured's lifetime for two years from its effective date or from the
effective date of reinstatement. Afterwards, we can only contest for not paying
premiums.
MISSTATEMENT OF AGE OR SEX. If the Insured's Age or sex is misstated in the
application, we will adjust the benefits for this Policy and any additional
benefit riders. The adjusted Death Benefit will be the Accumulation Value plus
the Insurance Risk Amount that the last Monthly Deduction would have provided
for the Insured's correct Age and sex. The adjusted benefits for any additional
benefit rider will be those for which the last Monthly Deduction would have
provided for the Insured's correct Age and sex.
MISSTATEMENT OF SMOKING: If the answers in the application concerning smoking by
the Insured are not correct, we will adjust the benefits for this Policy and any
additional benefit riders. The adjusted Death Benefit will be the Accumulation
Value plus the Insurance Risk Amount that the last Monthly Deduction would have
provided if the correct answers had been given. The adjusted benefits for any
additional benefit rider will be the amount the last Monthly Deduction would
have provided if the correct answers had been given.
SUICIDE: If the Insured commits suicide, while sane or insane, within two years
(one year in Colorado and North Dakota) from the Policy Date, the amount of the
Death Benefit will be equal to the current premiums paid, less Gross Partial
Surrender Amounts and any Policy Loan. If the Insured commits suicide, while
sane or insane, within two years (one year in Colorado and North Dakota) from
the effective date of a Specified Amount increase, the amount of the Death
Benefit will not include the Specified Amount increase. It will include a return
of the monthly insurance risk charges for the increase and any additional
expense charges we have deducted for the increase.
BASIS USED FOR CALCULATIONS. We base the guaranteed maximum standard monthly
costs of insurance rates on the Mortality Table Basis shown on your Schedule
Page.
Minimum Cash Values are calculated according to the standard non-forfeiture law.
The calculations are based on the Mortality Table Basis and the guaranteed
interest rate shown on the Schedule Page. All Policy values meet the standard
non-forfeiture law requirements.
We have filed a detailed statement of our computation method for all values and
reserves with the insurance department of the state where this Policy is
delivered. All values and reserves are equal to or greater than those required
by the laws of such state.
SUSPENSION OR DEFERRAL OF PAYMENTS. We will make any payments or loans under
this Policy within 7 business days of a request received in good order. We
reserve the right to postpone any type of payment from the Variable Account for
any period when:
1. The New York Stock Exchange is closed for other than customary weekend and
holiday closings;
2. Trading on the Exchange is restricted;
3. An emergency exists as a result of which it is not reasonably practicable to
dispose of securities held in the Variable Account or determine their value;
or
4. The Securities and Exchange Commission so permits delay for the protection
of security holders.
The applicable rules of the Securities and Exchange Commission will govern as to
whether the condition in (2) or (3) exist.
We reserve the right to delay any of the payments we make from the Fixed
Account, including Policy Loans, for up to six months from the date we receive
the required documents. We will pay interest at the rate required by the state
where this Policy is issued. We will not delay any loan made to pay premiums due
us on any Policy.
ANNUAL REPORT: For each Policy Year, we will send you a report for this Policy
that shows:
o The current Death Benefit;
o The value in the Fixed Account;
o The number of Accumulation Units, the Accumulation Unit value and the
current value in each of the Variable Options;
o The Cash Value;
o Any outstanding Policy Loan;
o The premiums paid; and
o Policy transactions for the year.
For the Variable Options, the report will show:
o The dollar amount of each transaction;
o The number of Accumulation Units involved in the transaction; and
o The Accumulation Unit value on the date of the transaction.
We will show other information required by the regulatory jurisdiction in which
this Policy is delivered.
AMENDMENT.We reserve the right to amend the Policy in order to include any
future changes relating to the following:
o Any Securities and Exchange Commission rulings and regulations.
o The Policy's qualification for treatment as a life insurance Policy under
the following:
- The Internal Revenue Code as amended;
- Internal Revenue Service Rulings and Regulations;
- Any requirements imposed by the Internal Revenue Service.
T40001
PART 13. THE SETTLEMENT OPTIONS
You, or the Beneficiary, as the Payee, may apply the proceeds to any one of the
options below.
The Settlement Proceeds are shown on the Schedule Page. The Payee may apply the
Settlement Proceeds to provide a fixed annuity, a variable annuity or a
combination fixed and variable annuity. If a combination is elected, the Payee
must specify what part of the Settlement Proceeds is to be applied to the fixed
and variable Annuity Options. If the Payee selects a fixed annuity, the
Settlement Proceeds are allocated to the Allianz Life's General Account. If the
Payee selects a variable annuity, the Settlement Proceeds are allocated to the
Variable Options according to the Payee's selection.
We will apply the Settlement Proceeds to the applicable annuity rate based upon
the Annuity Option the Payee selected. We may offer more favorable rates than
those guaranteed here at the time the first Annuity Payment is calculated.
Annuity Payments will depend on the Age and, where permitted, sex of the
Annuitant. The Annuitant is the person on whose life Annuity Payments in Options
1 through 5 depend. The Income Date is the date income payments are to begin.
FIXED ANNUITY: The Payee may elect to have the Settlement Proceeds applied to
provide a fixed annuity. The dollar amount of each fixed Annuity Payment is
guaranteed to be at least equal to:
o The Settlement Proceeds, divided first by $1000; multiplied by
o The appropriate Annuity Payment amount for each $1000 of value for the Annuity
Option selected.
We base the guaranteed rates, as set forth in the tables at the end of the
Policy, on an interest rate of 2 1/2% per year and the 1983(a) Individual
Annuity Mortality Table with mortality improvement projected 30 years using
Mortality Projection Scale G.
VARIABLE ANNUITY: The Payee may elect to have the Settlement Proceeds applied to
provide a variable annuity. Variable Annuity Payments reflect the investment
performance of the Variable Account in accordance with the allocation of the
Settlement Proceeds to the Variable Options during the Annuity Period. Variable
Annuity Payments are not guaranteed as to dollar amount.
On the Income Date, Annuity Units will be purchased as follows:
The first Annuity Payment is equal to:
o The Settlement Proceeds, divided first by $1000; multiplied by
o The appropriate Annuity Payment amount for each $1000 of value for the
Annuity Option selected as set forth in the table below.
In each Variable Option, the number of Annuity Units is equal to:
o The amount of the initial Annuity Payment determined for each Variable Option;
divided by o The Annuity Unit value on the Income Date.
Thereafter, the number of Annuity Units in each Variable Option remains
unchanged unless the Payee elects to transfer between the Variable Options. All
calculations will appropriately reflect the Annuity Payment frequency selected.
On each subsequent Annuity Payment date, the total Annuity Payment is the sum of
the Annuity Payments for each Variable Option. The Annuity Payment in each
Variable Option is equal to the number of Annuity Units in the Variable Option,
multiplied by the Annuity Unit value for that Variable Option.
On each subsequent Valuation Date, we calculate the value of an Annuity Unit in
the following way:
First: The net investment factor is determined as described under "Variable
Account - net investment factor" above.
Second: The value of an Annuity Unit for a Valuation Period is equal to:
a. The value of the Annuity Unit for the immediately preceding Valuation Period;
multiplied by
b. The net investment factor for the current Valuation Period; divided by
c. The assumed net investment factor for the Valuation Period.
The assumed net investment factor is equal to one plus the Assumed Investment
Return. The Assumed Investment Return determines the basis for the purchase of
an Annuity, adjusted to reflect the particular payment frequency. We show the
Assumed Investment Return on the Schedule Page. However, we may agree with the
Payee to use a different value.
ANNUITY OPTIONS: The settlement options provide Annuity Payments under one of
the Annuity Options described below. We may make available other annuity options
and other frequencies.
OPTION 1 - LIFE ANNUITY. We will make monthly Annuity Payments during the life
of the Annuitant, stopping with the last Annuity Payment due prior to the
Annuitant's death.
OPTION 2 - LIFE ANNUITY WITH MONTHLY PAYMENTS OVER 5, 10, 15 OR 20 YEARS
GUARANTEED. We will make monthly Annuity Payments during the life of the
Annuitant. We guarantee that if, at the Annuitant's death, there have been less
than 60, 120, 180 or 240 monthly Annuity Payments made as selected, we will
continue to pay monthly Annuity Payments for the remainder of the guaranteed
period.
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY. We will make monthly Annuity
Payments during the joint lifetime of the Annuitant and the Joint Annuitant.
Upon the death of the Annuitant, if the Joint Annuitant is then living, we will
continue to pay Annuity Payments during the remaining lifetime of the Joint
Annuitant at a level of 100%, 75% or 50% of the previous level, as selected.
Monthly Annuity Payments stop with the final Annuity Payment due prior to the
last survivor's death.
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH MONTHLY PAYMENTS OVER 5, 10, 15,
OR 20 YEARS GUARANTEED. We will make monthly Annuity Payments during the joint
lifetime of the Annuitant and the Joint Annuitant. We will continue to pay
monthly Annuity Payments during the remaining lifetime of the Joint Annuitant at
100% of the previous level. We guarantee that if at the last death of the
Annuitant and the Joint Annuitant, there have been less than 60, 120, 180, or
240 monthly Annuity Payments made as selected, we will continue to pay monthly
Annuity Payments for the remainder of the guaranteed period.
OPTION 5 - REFUND LIFE ANNUITY. We will make monthly Annuity Payments during the
lifetime of the Annuitant stopping with the last Annuity Payment due prior to
the Annuitant's death. At the Annuitant's death, the Payee may receive a refund.
For a fixed Annuity Option, the amount of the refund will be any excess of the
Settlement Proceeds applied under this Option over the sum of all Annuity
Payments made under this Option.
For a variable Annuity Option, the amount of the refund will be the then dollar
value of the number of Annuity Units equal to: (1) The Settlement Proceeds
applied to this Option divided by the Annuity Unit value used to determine the
first Annuity
Payment, minus
(2) The product of the number of the Annuity Units represented by each monthly
Annuity Payment and the number of payments made.
We base this calculation on the assumption that the allocation of Annuity Units
actually in-force at the time of the Annuitant's death had been the allocation
of Annuity Units at issue and at all times thereafter. If the refund calculated
above is not greater than zero, there will be no refund paid.
OPTION 6 - SPECIFIED PERIOD CERTAIN ANNUITY. Monthly Annuity Payments are paid
for a specified period of time. The Payee selects the Specified Period Certain.
The Payee must select a whole number of years from 5 to 30. If, at the time of
the last death of the Annuitant and any Joint Annuitant, the Annuity Payments
actually made have been for less than the Specified Period Certain, we will
continue to pay the monthly Annuity Payments for the remainder of the Specified
Period Certain.
If a variable Specified Period Certain option is selected, the Payee may make a
liquidation at least once per Policy Year. The Payee can make a liquidation up
to an amount equal to the present value of the remaining Annuity Payments based
on its current value, to the end of the Specified Period Certain, discounted at
the Assumed Investment Return. We process the liquidation on the next Annuity
Payment Date following the written request.
OPTION 7- FIXED INTEREST OPTIONS. Proceeds held under the Fixed Interest Options
will earn interest from the effective date of the payment contract. We declare
the interest rate each year. We guarantee the interest rate will not be less
than a 2 1/2%% effective annual rate.
When the option is selected, we will agree with the Payee on any right to
withdraw money under the Interest Options.
(A). INTEREST ACCUMULATION. The proceeds will earn interest for a period of not
more than 30 years.
(B). INTEREST INCOME. The proceeds will earn interest for a period of not more
than 30 years. We will pay interest at the end of each month. The Payee may
select quarterly, semi-annual or annual interest payments instead with our
approval.
L40390
TABLE OF ANNUITY PAYMENT AMOUNTS: Table A below shows the guaranteed amount of
the Annuity Payment for each $1,000 of proceeds applied under a fixed Annuity
Option. Table A is based on an interest rate of 2 1/2% per year and the 1983(a)
Individual Mortality Table with mortality improvement projected 30 years using
Mortality Projection Scale G.
Table B below shows the amount of the first monthly variable Annuity Payment,
based on an Assumed Investment Return of 5%, for each $1,000 of proceeds applied
under a variable Annuity Option.
The amount of such Annuity Payments under Annuity Options 1, 2 and 5 will depend
on the sex and Age of the Annuitant on the Income Date. The amount of such
Annuity Payments under Option 3 and 4 will depend on the Age and sex of the
Annuitant and Joint Annuitant on the Income Date. We will provide any amounts
not shown for Ages, guaranteed periods or other Annuity Options upon request.
-----------------------------------------------------------------------------------------------------------------------------
TABLE A - GUARANTEED MONTHLY ANNUITY PAYMENTS PER $1,000 OF PROCEEDS
-----------------------------------------------------------------------------------------------------------------------------
FIXED ANNUITY OPTIONS
-----------------------------------------------------------------------------------------------------------------------------
AGE OF ANNUITANT OPTION 1 OPTION 2 OPTION 3 OPTION 4 OPTION 5
NEAREST BIRTHDAY
WHEN FIRST
PAYMENT IS MADE
-----------------------------------------------------------------------------------------------------------------------------
GUARANTEED GUARANTEED 100% JOINT AND GUARANTEED
PERIOD OF PERIOD OF LAST SURVIVOR PERIOD OF
10 YEARS 20 YEARS 10 YEARS
----------------------------------------------------------------------------------------------------------
MALE FEMALE MALE FEMALE MALE FEMALE MALE & FEMALE MALE & FEMALE MALE FEMALE
SAME AGE SAME AGE
-----------------------------------------------------------------------------------------------------------------------------
30 2.85 2.72 2.84 2.72 2.84 2.71 2.61 2.61 2.81 2.70
-----------------------------------------------------------------------------------------------------------------------------
40 3.17 2.97 3.16 2.97 3.14 2.96 2.82 2.82 3.10 2.94
-----------------------------------------------------------------------------------------------------------------------------
50 3.67 3.38 3.65 3.37 3.58 3.34 3.14 3.14 3.51 3.29
-----------------------------------------------------------------------------------------------------------------------------
60 4.50 4.03 4.43 4.01 4.18 3.90 3.67 3.67 4.13 3.84
-----------------------------------------------------------------------------------------------------------------------------
70 6.03 5.23 5.70 5.10 4.83 4.62 4.59 4.58 5.11 4.72
-----------------------------------------------------------------------------------------------------------------------------
80 8.92 7.68 7.43 6.88 5.21 5.16 6.40 6.21 6.66 6.18
-----------------------------------------------------------------------------------------------------------------------------
90 14.75 13.12 8.94 8.74 5.27 5.27 10.23 8.42 9.39 8.81
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
TABLE B - GUARANTEED INITIAL MONTHLY ANNUITY PAYMENT PER $1,000 OF PROCEEDS
-----------------------------------------------------------------------------------------------------------------------------
VARIABLE ANNUITY OPTION BASED ON 5% ASSUMED INVESTMENT RETURN
-----------------------------------------------------------------------------------------------------------------------------
AGE OF ANNUITANT OPTION 1 OPTION 2 OPTION 3 OPTION 4 OPTION 5
NEAREST BIRTHDAY
WHEN FIRST
PAYMENT IS MADE
-----------------------------------------------------------------------------------------------------------------------------
GUARANTEED GUARANTEED 100% JOINT AND GUARANTEED
PERIOD OF PERIOD OF LAST SURVIVOR PERIOD OF
10 YEARS 20 YEARS 10 YEARS
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
MALE FEMALE MALE FEMALE MALE FEMALE MALE & FEMALE MALE & FEMALE MALE FEMALE
SAME AGE SAME AGE
-----------------------------------------------------------------------------------------------------------------------------
30 4.46 4.36 4.46 4.35 4.45 4.35 4.27 4.27 4.44 4.35
-----------------------------------------------------------------------------------------------------------------------------
40 4.72 4.55 4.71 4.55 4.68 4.53 4.41 4.41 4.68 4.53
-----------------------------------------------------------------------------------------------------------------------------
50 5.18 4.89 5.14 4.87 5.04 4.83 4.65 4.65 5.06 4.83
-----------------------------------------------------------------------------------------------------------------------------
60 5.96 5.49 5.86 5.45 5.56 5.31 5.10 5.10 5.70 5.36
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70 7.49 6.65 7.07 6.47 6.13 5.94 5.96 5.94 6.77 6.27
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80 10.42 9.12 8.68 8.16 6.46 6.41 7.72 7.50 8.54 7.94
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90 16.30 14.63 10.08 9.89 6.51 6.51 11.54 9.58 11.63 10.92
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MORE INFORMATION ABOUT OUR SETTLEMENT OPTIONS
AMOUNTS TOO SMALL. If income payments would be less than $20, we may change the
frequency of payments. We will not allow amounts less than $5,000 to be applied
under any payment option.
AUTOMATIC CANCELLATION. We will cancel a previous election of a settlement
option for Death Benefits if:
o ownership of this Policy is transferred; or
o the Beneficiary is changed
TABLE OF DEATH BENEFIT FACTORS
This table is based on the Insured's age last birthday at the beginning of the Policy Year (attained age).
------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Attained Male Male Female Female Attained Male Male Female Female
Age NonSmoker Smoker Nonsmoker Smoker Age Nonsmoker Smoker Nonsmoker Smoker
------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
0 12.34 10.40 14.39 12.92 50 2.58 2.20 2.91 2.64
1 12.22 10.25 14.19 12.70 51 2.50 2.14 2.82 2.57
2 11.89 9.95 13.79 12.33 52 2.43 2.08 2.74 2.50
3 11.55 9.65 13.40 11.97 53 2.35 2.03 2.66 2.43
4 11.22 9.35 13.01 11.60 54 2.28 1.97 2.58 2.36
5 10.89 9.06 12.62 11.25 55 2.22 1.92 2.50 2.30
6 10.56 8.78 12.24 10.90 56 2.15 1.88 2.43 2.24
7 10.23 8.49 11.86 10.55 57 2.09 1.83 2.35 2.18
8 9.91 8.21 11.50 10.21 58 2.03 1.79 2.29 2.12
9 9.59 7.94 11.13 9.88 59 1.98 1.75 2.22 2.07
10 9.28 7.67 10.78 9.56 60 1.92 1.71 2.16 2.01
11 8.98 7.41 10.43 9.25 61 1.87 1.67 2.09 1.96
12 8.69 7.16 10.10 8.94 62 1.82 1.63 2.03 1.91
13 8.41 6.93 9.77 8.65 63 1.77 1.60 1.98 1.86
14 8.15 6.70 9.46 8.36 64 1.73 1.57 1.92 1.82
15 7.91 6.49 9.16 8.09 65 1.69 1.54 1.87 1.77
16 7.68 6.29 8.87 7.83 66 1.65 1.51 1.82 1.73
17 7.46 6.10 8.59 7.57 67 1.61 1.48 1.77 1.69
18 7.25 5.91 8.32 7.32 68 1.57 1.45 1.73 1.65
19 7.05 5.74 8.05 7.09 69 1.54 1.43 1.68 1.61
20 6.86 5.56 7.80 6.86 70 1.50 1.40 1.64 1.57
21 6.66 5.41 7.55 6.64 71 1.47 1.38 1.60 1.54
22 6.46 5.25 7.31 6.42 72 1.44 1.36 1.56 1.51
23 6.27 5.10 7.07 6.22 73 1.41 1.34 1.52 1.47
24 6.08 4.95 6.84 6.02 74 1.39 1.32 1.49 1.44
25 5.89 4.80 6.62 5.82 75 1.36 1.30 1.45 1.41
26 5.70 4.65 6.41 5.63 76 1.34 1.28 1.42 1.39
27 5.52 4.50 6.20 5.45 77 1.32 1.27 1.39 1.36
28 5.34 4.36 5.99 5.27 78 1.30 1.25 1.36 1.34
29 5.17 4.22 5.80 5.10 79 1.28 1.24 1.34 1.31
30 5.00 4.09 5.61 4.94 80 1.26 1.23 1.31 1.29
31 4.83 3.95 5.42 4.77 81 1.24 1.21 1.29 1.27
32 4.67 3.83 5.24 4.62 82 1.23 1.20 1.27 1.25
33 4.52 3.70 5.07 4.47 83 1.21 1.19 1.25 1.23
34 4.37 3.58 4.90 4.32 84 1.20 1.18 1.23 1.22
35 4.22 3.47 4.74 4.18 85 1.18 1.17 1.21 1.20
36 4.08 3.36 4.58 4.05 86 1.17 1.16 1.19 1.19
37 3.95 3.25 4.43 3.92 87 1.16 1.15 1.18 1.17
38 3.82 3.15 4.28 3.79 88 1.15 1.14 1.17 1.16
39 3.69 3.05 4.14 3.67 89 1.14 1.13 1.15 1.15
40 3.57 2.95 4.01 3.56 90 1.13 1.13 1.14 1.14
41 3.45 2.86 3.88 3.45 91 1.12 1.12 1.13 1.13
42 3.34 2.77 3.76 3.34 92 1.11 1.11 1.11 1.11
43 3.23 2.69 3.64 3.24 93 1.10 1.10 1.10 1.10
44 3.13 2.61 3.52 3.15 94 1.09 1.09 1.09 1.09
45 3.03 2.53 3.41 3.05 95 1.07 1.07 1.08 1.08
46 2.93 2.46 3.30 2.97 96 1.06 1.06 1.06 1.06
47 2.84 2.39 3.20 2.88 97 1.05 1.05 1.05 1.05
48 2.75 2.32 3.10 2.80 98 1.03 1.03 1.03 1.03
49 2.67 2.26 3.00 2.72 99 1.02 1.02 1.02 1.02
100 and over 1.00 1.00 1.00 1.00
THE COST OF INSURANCE RATES FOR EACH POLICY MONTH FOR A STANDARD RISK
CLASSIFICATION WILL NOT BE MORE THAN THE AMOUNT SHOWN IN THE TABLE BELOW. THE
TABLE IS BASED ON THE INSURED'S AGE LAST BIRTHDAY AT THE BEGINNING OF EACH YEAR
(ATTAINED AGE), THE INSURED'S SEX AND WHETHER OR NOT THE INSURED HAS QUALIFIED
FOR THE NON-SMOKER CLASSIFICATION. FOR THE INITIAL SPECIFIED AMOUNT, THE
INSURED'S ATTAINED AGE IS DETERMINED AT THE BEGINNING OF EACH POLICY YEAR. FOR
EACH SPECIFIED AMOUNT INCREASE, ATTAINED AGE IS DETERMINED AT THE BEGINNING OF
EACH YEAR MEASURED FROM THE DATE THE INCREASE TOOK EFFECT.
TABLE OF GUARANTEED MAXIMUM STANDARD MONTHLY
COST OF INSURANCE RATES PER 1,000 INSURANCE RISK AMOUNT
MALE FEMALE MALE FEMALE MALE FEMALE
Att. Att. Standard Standard Standard Standard Att. Standard Standard Standard Standard
Age Standard* Standard* Age Non-SmokerSmoker* Non-Smoker Smoker* Age Non-SmokerSmoker* Non-Smoker Smoker*
--- --------- --------- --- ----------------- ---------- ------- --- ----------------- ---------- -------
0 0.22 0.16 30 0.12 0.18 0.10 .013 65 1.88 3.22 1.20 1.68
1 0.09 0.07 31 0.12 0.18 0.11 0.14 66 2.08 3.51 1.32 1.83
2 0.08 0.07 32 0.13 0.19 0.11 0.14 67 2.29 3.82 1.44 1.97
3 0.08 0.06 33 0.13 0.20 0.12 0.15 68 2.53 4.14 1.57 2.12
4 0.08 0.06 34 0.14 0.21 0.12 0.13 69 2.80 4.49 1.71 2.28
5 0.07 0.06 35 0.14 0.23 0.13 0.17 70 3.10 4.88 1.88 2.47
6 0.07 0.06 36 0.15 0.24 0.13 0.18 71 3.44 5.31 2.08 2.71
7 0.06 0.06 37 0.16 0.26 0.14 0.20 72 3.84 5.81 2.33 3.01
8 0.06 0.06 38 0.17 0.29 0.16 0.22 73 4.29 6.37 2.64 3.36
9 0.06 0.06 39 0.18 0.31 0.17 0.24 74 4.79 6.98 2.98 3.77
10 0.06 0.06 40 0.20 0.35 0.18 0.26 75 5.33 7.64 3.38 4.21
11 0.07 0.06 41 0.21 0.38 0.20 0.29 76 5.91 8.32 3.80 4.69
12 0.08 0.06 42 0.23 0.42 0.21 0.32 77 6.51 9.01 4.26 5.19
13 0.09 0.06 43 0.25 0.45 0.23 0.34 78 7.15 9.71 4.76 5.73
14 0.10 0.07 44 0.27 0.50 0.24 0.37 79 7.85 10.45 5.32 6.31
15 0.12 0.07 45 0.29 0.55 0.26 0.40 80 8.62 11.26 5.96 6.97
16 0.13 0.08 46 0.31 0.60 0.28 0.43 81 9.50 12.15 6.70 7.73
17 0.14 0.08 47 0.34 0.64 0.29 0.46 82 10.50 13.16 7.56 8.60
18 0.15 0.08 48 0.36 0.71 0.31 0.49 83 11.63 14.26 8.55 9.61
19 0.16 0.09 49 0.39 0.77 0.34 0.53 84 12.86 15.43 9.65 10.73
50 0.43 0.84 0.36 0.57 85 14.18 16.62 10.86 11.93
MALE FEMALE 51 0.47 0.92 0.39 0.61 86 15.57 17.80 12.17 13.21
---- ------
52 0.51 1.00 0.42 0.65 87 17.00 19.04 13.59 14.57
Att. Standard Standard Standard Standard 53 0.57 1.11 0.46 0.71 88 18.49 20.35 15.13 16.01
Age Non-Smoker Smoker Non-Smoker Smoker 54 0.62 1.22 0.49 0.76 89 20.04 21.01 16.79 17.53
--- ---------- ------ ---------- ------
20 0.14 0.19 0.08 0.10 55 0.69 1.33 0.53 0.81 90 21.69 23.03 18.61 19.26
21 0.14 0.19 0.09 0.10 56 0.76 1.46 0.57 0.87 91 23.49 24.47 20.64 21.16
22 0.14 0.19 0.09 0.10 57 0.83 1.59 0.61 0.92 92 35.50 26.17 22.97 23.32
23 0.13 0.19 0.09 0.10 58 0.92 1.73 0.65 0.97 93 27.96 28.41 25.80 25.94
24 0.13 0.18 0.09 0.11 59 1.01 1.87 0.69 1.02 94 31.38 31.56 29.59 29.59
25 0.13 0.18 0.09 0.11 60 1.12 2.04 0.74 1.09 95 36.80 36.80 35.37 35.37
26 0.12 0.17 0.09 0.11 61 1.23 2.23 0.80 1.16 96 46.59 46.59 45.53 45.53
27 0.12 0.17 0.10 0.12 62 1.37 2.45 0.88 1.27 97 67.04 67.04 66.32 66.32
28 0.12 0.17 0.10 0.12 63 1.52 2.68 0.97 1.39 98 120.67 120.67 120.23 120.23
29 0.12 0.17 0.10 0.13 64 1.69 2.95 1.08 1.53 99 120.67 120.67 120.23 120.23
*RECLASSIFICATION. At least 30 days before the Insured attains Age 20, we will
notify the Owner that the Insured will be reclassified at a smoker or non-smoker
status. We will include any forms we need to process the reclassification. For
the Insured to be classified as a non-smoker, we will require satisfactory
evidence that the Insured meets our requirements for the non-smoker
classification. If the Insured qualifies for the non-smoker classification,
non-smoker cost of insurance rates will apply for Policy Years beginning on and
after the date of approval. If the Insured does not qualify for the non-smoker
classification or we do not receive the completed reclassification forms; smoker
cost of insurance rates will apply for Policy Years beginning at Age 20.
IF THE RISK CLASSIFICATION IS NOT STANDARD OR BETTER, THE GUARANTEED RATES FOR
THE POLICY ARE ANY SPECIFIED FLAT EXTRAS SHOWN ON THE POLICY SCHEDULE PLUS THE
ABOVE RATES MULTIPLIED BY THE TABLE MULTIPLIER SHOWN ON THE SCHEDULE PAGE
WHERE TO FIND IT PAGE
Additional Surrender Charges.............................ii, iii
Amendment................................................15
Anniversaries............................................3, i
Annual Report............................................15
Basis of Calculations....................................14
Beneficiaries............................................5
Cash Value...............................................12
Charges for Specified Amount Increases...................ii
Contesting the Policy....................................14
Death Benefit Options....................................6
Decrease in Specified Amount.............................7
Grace Period.............................................8
Guaranteed Monthly Cost of Insurance Rates...............22
Increase in Specified Amount.............................6
Interest Rates...........................................i
Loans....................................................13
Maturity Benefit.........................................7
Maturity Date............................................3, i
Misstatement of Age or Sex...............................14
Misstatement of Smoking..................................14
Monthly Deductions.......................................9
Monthly Expense Charges..................................ii
Net Cash Value...........................................12
Ownership................................................3
Partial Surrenders.......................................12
Policy Dates.............................................i
Policy Loan..............................................13
Premium Payments.........................................7
Reinstating the Policy...................................8
Schedule Page............................................i
Suicide..................................................14
Table of Death Benefit Factors...........................21
Table of Guaranteed Standard Maximum Cost of Insurance...22
Termination of Coverage..................................8
Transferring the Policy..................................5
Use of Policy as Collateral Security.....................5
24
L40390
[ALLIANZ LOGO]
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
Home Office: Minneapolis, Minnesota
Service Center: [PO Box 3031, Berwyn Park PA 19312
Toll Free # 000-000-0000]
A Stock Company
A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY WITH ADJUSTABLE
DEATH BENEFIT. Insurance is payable at the Insured's death prior to the Maturity
Date and prior to termination of coverage. Values provided by this Policy are
based on declared interest rates in the Fixed Account, and on the investment
experience of the Variable Account. Value in the Variable Account is not
guaranteed as to dollar amount. The minimum Death Benefit will be at least equal
to the Initial Specified Amount unless you make a policy change; make a Partial
Surrender or Policy Loan; or make a claim reducing the Death Benefit. The Net
Cash Value is payable on the Maturity Date if the Insured is living.
This is a non-participating Policy.
